Oil Speculators Driving Up Price Of Oil Based On Iran Nuclear Threat

The last time the price of Brent crude closed below $100 a barrel was Oct. 6, 2011. It’s since gone up nearly 30 percent, to a high of $126.20 on March 1. Tensions over Iran’s nuclear program have people spooked that a potential attack would disrupt the country’s 2.2 million barrels of daily oil exports. And so money has been pouring into oil futures contracts, driving up the price without any significant change in the underlying supply-and-demand fundamentals. Only the threat of one.

So who’s buying?

Read the whole story at Bloomberg

Comments

[Kenz300]

08:25 PM on 03/09/2012

Long haul truckers are switching to LNG.

GM just announced that they will begin selling CNG fuels pickup trucks in April.

Chrysler will be selling CNG fueled pick up trucks.

Honda sells a CNG fueled car.

40+mpg is better than 12 MPG....... Electric, flex-fuel vehicles and CNG vehicles are being offered by many manufacturers.

Biofuels can now be made from trash. Every landfill can now be converted to make biofuels, energy (methane) and raw materials for new products. There are a lot of landfills and trash all across the country that can produce fuel.

We will all use energy more wisely as the price of oil continues to rise. Fuel efficiency will become a bigger part of our buying decisions for our homes, cars, appliances and even light bulbs

[Kenz300]

08:16 PM on 03/09/2012

Oil companies love it when oil prices spike. They mage huge profits.

Bring on the competition.

Long haul truckers are switching to LNG.

GM, Chrysler and Ford are starting to sell CNG fueled trucks.

[Kenz300]

08:07 PM on 03/09/2012

Rising demand for oil from China and India is outpacing increases in supplies around the world.
China is now the worlds largest auto market. They are also the worlds second largest economy and soon to be the largest. The era of cheap oil is over.

[evilgoogleman]

02:36 PM on 03/09/2012

Let's face it folks... The real story is energy... All the important stories of the day are about energy but clearly it not important enough to get us off oil but important enough to go to war over.

Why? The moment energy becomes cheap, solar, wind, geo, hydro, the people running the world, will lose that power. This is what all the trouble is, not only that we are running out of it (getting the last little bits out of the ground to exploit) but it threatens their hold on the planet. Their days are numbered.

[Republicanistan]

01:44 PM on 03/09/2012

Gee, if the Republibaggers weren't talking up War with Iran gas would be $3.

Who knew?

O wait, all their donors are Big Oil....hmmmm....so their donors benefit from War with Iran...

Shocking and surprising I tell ya!

[MyIrishEyes]

09:47 PM on 03/09/2012

Say WHAT?!?
BP and its employees have given more than $3.5 million to federal candidates over the past 20 years, with the largest chunk of their money going to Obama, according to the Center for Responsive Politics. Donations come from a mix of employees and the company's political action committees - $2.89 million flowed to campaigns from BP-related PACs and about $638,000 came from individuals.

[Republicanistan]

11:33 PM on 03/09/2012

"A Center for American Progress Action Fund analysis finds that the 48 senators who sided with Big Oil received over $21 million in career oil contributions, while 52 senators who sided with the American people received only $5.4 million in contributions. Each senator who voted for Big Oil received on average more than four times as much oil cash as those who voted to end the subsidies."

75% of all donations to politicians by Big Oil are Republicans.

[imusintheevening]

11:38 AM on 03/09/2012

Finally, an article that starts to address the real basis for the rising cost of oil. The leverage of the futures contracts is just too sweet for the money managers.

[UDKM2010]

07:20 AM on 03/09/2012

I read Natural Gas is about half the price of gasoline on an equivalent basis. Why have we not pursued natural gas to power our cars?

[MIKEBC]

07:43 AM on 03/09/2012

If it was good for the people then republicans would find something they don't like about it.

[doctorkosan]

11:02 AM on 03/09/2012

You can buy an NG powered car. They cost about $18,000 more than a gas fueled vehicle so you never get a financial return for using the cheaper fuel. Also there is a dearth of fueling stations.
Those 2 things have to change before NG powered vehicles are a real option.

[sysaphus71]

07:19 AM on 03/09/2012

No one has explained why speculators are not required to take delivery of product in 10 days.Also further increase minimums required to trade the option.
At least knock out some of the abuses

[SwiftJonathan]

07:55 PM on 03/09/2012

Why would a speculator take deliver for oil on a contract six months into the future? He didn't pay for this oil. He merely made a bet, at a fraction of the cost of the actual oil, on what it will be worth some time in advance.

But let's say they would take delivery of that oil, how would that help you? Now they would be sitting on it and it would never make it to the gas station... meaning that the price for gasoline would go through the roof.

Hoarding commodities, by the way, is illegal, so even if they wanted to, they are not allowed to.

[joeisright]

07:19 AM on 03/09/2012

Just keep printing that money.

[MIKEBC]

07:44 AM on 03/09/2012

I bet you had no problem with printing money when the rightwing party was taking us to war last decade.

[4 EYES]

07:51 AM on 03/09/2012

...AND...misplacing it by the skid load....

[4 EYES]

07:53 AM on 03/09/2012

Worked out pretty well for CH3N3Y, didn't it?

[AlanBannacheck]

06:05 AM on 03/09/2012

Also the dollar is worth less apparently as well. By 2020 gasoline oil will easily be at 7-8 dollars a gallon at this rate.

[doctorkosan]

11:03 AM on 03/09/2012

Just like Europe is today.

[imusintheevening]

11:40 AM on 03/09/2012

The Euro was 88 cents when GWBush entered office. In August of 2008 it was $1.60, now it is $1.31.

[wolf58]

06:03 AM on 03/09/2012

Make those who are trading on the margins put 90 percent of their own money down instead of only 10 percent and require them to take delevery within 7 days. Do these two things and watch how many run from this market.

[chris hatala]

05:38 AM on 03/09/2012

Cut to the chase, it is the tpubs and their oily friends like the Koch boys.

[MIKEBC]

07:45 AM on 03/09/2012

The republicans big oil buddies are trying to wreck the economy for political gain.

[Kenz300]

08:11 PM on 03/09/2012

The oil companies like it when oil prices spike. They make windfall profits.

We need competition at the pump. Oil companies do not want that.

Bring on electric, flex-fuel, hybrid, CNG, LNG and hydrogen fueled vehicles.

We need choice at the pump.

[SitandStay]

03:48 AM on 03/09/2012

"Oil Market Dynamics and the Fear Factor
Crude oil prices are surging due to fears of potential supply disruptions related to the rising global tensions surrounding Iran’s nuclear ambitions. This rise in crude oil prices has occurred despite increased supply from Saudi Arabia, more production in the US and Canada, less US imports, slower oil demand growth due to stagnation in Europe and decelerating growth in China, and competition from cheaper alternative sources of energy such as natural gas. That is, the purely economic supply/demand fundamentals of the oil market might suggest lower oil prices. The addition to the oil price equation of the geo-political dimension of fear trumps the economic fundamentals.

This is a current example of the challenges markets face in combining two distinctly different scenarios. One scenario has a very low, but all too real, probability of an outcome with dire consequences, while the other has a high probability, but by no means certain outcome of market stability and economic optimism."

www.CMEGroup.com

The Republicans are /i@rs as they tell you it's Obama fault.

Sure, Newtie, bring the $2 a gallon gas, are you going to send out unsolicited credit cards to every Tom Dick and Harry to create a fraudulent economy like Reagan (Bush 40) administration.

[SitandStay]

03:44 AM on 03/09/2012

Who's driving up the price of oil?.......Perhaps you should ask The son of Sen Saxby Chambliss-R GA. He was the director of CME Group Inc. "Jan 4, 2010 – CME Group Inc. lobbyist Bo Chambliss is leaving the world's largest futures exchange after almost six years as the derivatives industry faces ...'
That lobbying group that contributed and posted at least $520,000 for agriculture lobbying alone, has this to say......(And also they speculate and advise on futures and options)

www.CMEGroup.com

[SitandStay]

03:53 AM on 03/09/2012

Hilarious.....after the horse is out of the barn and reaped all the rewards.....
"Chambliss's son Bo is a registered lobbyist for the Chicago Mercantile Exchange and lobbies on commodity futures trading issues that fall under legislative jurisdiction of the Senate Agriculture Committee, of which the Senator is a member. The Senator's office enacted a policy that prevents Bo from lobbying the Senator or his staff."

[wsdave]

02:16 AM on 03/09/2012

"Who's Driving Up The Price Of Oil?"

Well, if the cost to fill my tank is any indication, its me....